By: Andrew Chuter, November 29, 2016
LONDON – The UK government could use the new Type 31 frigate program to boost national shipbuilding capabilities and end BAE Systems’ monopoly on the construction of surface warships here, said a report into the future of the industry released Nov 29.
Having the Type 31 built by an industry alliance not led by BAE could be a « pathfinder » towards the rejuvenation of naval shipbuilding, Sir John Parker said in a report about the implementation of a national shipbuilding strategy commissioned by the government.
The report has been published just days after the Ministry of Defence announced it was throwing open to public consultation a possible revamp of its wider defense industrial strategy. Parker’s recommendations will be considered as part of the wider strategy work.
Under new Prime Minister Theresa May, the government is championing the introduction of a new industrial strategy to boost Britain’s manufacturing sector.
Britain committed to building eight Type 26 anti-submarine warfare frigates and five Type 31 general-purpose frigates in the strategic defence and security review last year.
Parker, currently the chairman of Anglo American but previously a highly regarded figure in the shipbuilding sector here, recommended that all the Type 26’s should be built by BAE at its two yards in Glasgow, Scotland, but the Type 31 program should be led by another company or alliance.
BAE responded to the report issuing a statement saying that as the « custodian of the UK’s capability to design and build complex warships we are confident that we will continue to play a prominent role in the delivery of future UK warships. … The commitment to five River-class offshore patrol vessels and eight Type 26’s protects this capability and our shipbuilding skills providing continuous warship building production at our facilities in Glasgow into the 2030s. »
Parker justified the two-primes approach saying, « There is no precedence for building two first-of-class Royal Navy frigates in one location [in a similar timeframe]. »
The executive said the Type 31 program should « harness » regional shipyards in the UK that have demonstrated their competitiveness and capability to build fully outfitted blocks of the warship.
If the recommendation is accepted by the government it could open the door to largely commercial shipyards like the A&P Group, Babcock’s Appledore facility, Cammell Laird and Harland & Wolff.
Parker never mentioned the issue but most of the potential block builders are English-based and their presence on a program like the Type 31 would leave open some options to the government in London were Scotland to vote for independence in any future referendum.
Ahead of the last referendum in 2014 the government threatened to pull it’s warship orders out of Scotland had voters north of the border voted for independence.
Parker said there was already a renaissance in shipbuilding in a range of regional shipbuilding companies.
The national shipbuilding strategy « could take the industry on a transformational journey similar to that experienced by our rejuvenated car industry, » he said.
Once the world’s largest warship builder, the industry directly employs around just 15,000 people today.
Parker said an alliance approach could also be used to allow British yards to bid against international rivals for the construction of three large logistics supply ships. Contract award is expected in 2020.
Logistics vessels are not required to be built in Britain, unlike complex warships like the Type 26.
The Royal Navy’s two 70,000 tonne aircraft carriers now coming to the end of their build program at Babcock International’s Rosyth, Scotland, yard contracted out the construction of modules to several yards around Britain.
The BAE-led industry alliance responsible for the program had the huge modules floated around the coast of Britain to Rosyth where they were assembled like a giant Meccano set.
The Ministry of Defence recently announced it expected BAE to cut the first steel on the lead Type 26 frigate next summer.
The first warship is needed by 2023 to start replacing the Royal Navy’s Type 23 frigate fleet.
The Type 31 timeline has not been made public but work is someway behind the anti-submarine warfare frigate.
For the moment, the general-purpose warship is in the pre-concept stage, with program officials still looking which of several potential designs to adopt.
« The Type 26 is critical for the Royal Navy and the nation while the Type 31 is urgently required to maintain frigate fleet numbers.To establish a separate lead shipyard or alliance would appear to be the best way forward for Type 31e to minimise the overall risk, » Parker said.
One industry analyst, who asked not to be named, queried Parker’s take on which approach offered the greatest risk.
« Is it giving BAE two warship types to build or signing up a contractor who may not have built a complex ship of this nature in a generation? » he said.
The analyst said the problem for BAE in losing control of the Type 31e program would come in a design department which is likely to see a rundown in Type 26 work around the end of 2019.
BAE would still be able to compete for combat systems and block building work, said Parker.
The Anglo Amercian executive said he had called the general-purpose frigate the Type31e to emphasize the warship had to be exportable.
Parker said the MoD needed to get on and procure the Type31e as rapidly as possible and place it in service as early as possible in the 2020s.
If the money is not available to match the timeline, « wider government support should be provided to allow early vessel build, » he said.
Money is a real issue if Parker is to meet his aspirations for an early start to the Type 31e.
« There is no money in the government’s ten-year equipment plan for Type 31e, and it would likely take somewhere between £1.5 billion and £2 billion to get the program on the road in the timescale Sir Peter is recommending, » said one industry executive who asked not to be named.
The report said the MoD needed to come up with a 30-year naval shipbuilding road plan for the different shipbuilding programs, with assured budgets not subject to « random » program changes triggered by annual budget adjustments.
Parker didn’t restrict his recommendations to the industrial aspect of shipbuilding. The executive also took a pot shot at MoD’s procurement and program governance shortcomings.
The executive said naval procurement took far too long. « There are too many people who think they have a vote and even a veto in the process. »
« There was a lack of governance systems that grip design and specifications to budget and time to contract, » he said.
Trevor Taylor, a defense-management analyst at the Royal United Services Institute think tank in London, said the report highlighted longstanding acquisition issues at the MoD.
« The report reflects the problems in defense acquisition that were visible at the time of the Smart Acquisition initiative in 1998.The Royal Navy appears to have learned little about the management of the supply base or the link between requirement and cost, » said Taylor